‘BP must divest from Russian oil firm or pay for Ukraine’s reconstruction’

Dame Margaret Hodge called for the British company to cut its ties with oil firm Rosneft, which is majority owned by the Russian state.

Oil giant BP must divest from its Russian assets or put the profits towards rebuilding Ukraine, a Labour former minister has said (Ozerkina/Alamy/PA)

Oil giant BP must divest from its Russian assets or put the profits towards rebuilding Ukraine, a Labour former minister has said.

Dame Margaret Hodge called for the British company to cut its ties with oil firm Rosneft, which is majority owned by the Russian state.

She described BP’s profits from Rosneft as “blood money”, echoing the words of Ukrainian president Volodymyr’s Zelensky’s economic adviser.

Oleg Ustenko has reportedly written to BP urging it to sell its shares in the Kremlin-backed oil firm.

In a statement, BP said it took the decision to exit its shareholding in Rosneft and other businesses in Russia three days after the invasion began earlier this year, and since then has not received any dividends from Rosneft shares.

Dame Margaret told the Commons: “In February, three days after the war started, BP said, and I quote, it will ‘exit its 19.75% shareholding in Rosneft’, Russia’s main oil company.

It is appalling what Putin has done in Ukraine but I am not going to comment on specific UK companies, or taxpayers, or their commercial decisions

Treasury minister James Cartlidge

“Despite this promise, BP remains one of the largest shareholders and, according to the excellent research by Global Witness, they are set to receive £580 million in dividends on the back of bumper profits fuelled by the war.

“Does the minister agree with me that it is utterly shameful that a large publicly-listed British company profits from the sale of oil that is funding Putin’s war?

“Does he further agree with the words of Mr Ustenko, President Zelensky’s economic adviser, who wrote to BP and said, ‘This is blood money, pure and simple’?”

The MP for Barking added: “Will this Government therefore work to persuade BP to donate the entirety of its Russian dividends to the reconstruction of Ukraine? And, if this fails, will he commit to act and force them to do so through a special windfall tax?”

Treasury minister James Cartlidge said any firm divesting from Russian assets will not face “a straightforward process”.

Mr Cartlidge said: “I do entirely understand why people feel as strongly as they do on this subject. I feel strongly. It is appalling what Putin has done in Ukraine but I am not going to comment on specific UK companies, or taxpayers, or their commercial decisions.

“What I would say to her and to colleagues is I have set out the range of measures that we are taking. It is important to stress that while we all want to see companies that have committed to divesting doing so, there are, of course, issues presented.

“I don’t say this with specific prejudice to any firm or any individual company, but, for example, I think were it to be the case, for example, that a firm divesting from Russia selling its shares were to sell them in such a way that they returned to an individual or entity that was sanctioned, for example, there would be condemnation of that – and rightly so.”

Mr Cartlidge said the UK “can be very proud of the enormous effort we have taken as a country” to support Ukraine.

But he continued to insist he would not comment on individual companies, despite pressure from MPs.

Conservative MP Julian Lewis (New Forest East) said: “What I think we’re looking for here is a way of the Government being able to intervene to stop private companies somehow drilling a hole in the bottom of the bucket while we are pouring in water at the top.

“Is there nothing really that can be done to impound or confiscate or levy a tax against money that has been raised in this unacceptable way?”

Is there nothing really that can be done to impound or confiscate or levy a tax against money that has been raised in this unacceptable way?

Conservative MP Julian Lewis

And Conservative MP Mark Pritchard (The Wrekin) asked how the Government could encourage such companies to divest fully rather than just “offer warm words”.

Labour MP Karl Turner (Hull East) said: “The reason the minister is having difficulty mentioning specific businesses is because one of them is Infosys.”

The Prime Minister’s wife, Akshata Murty, is reported to have a stake in the Indian IT giant, which was founded by her father.

Earlier in the session, Labour former minister Chris Bryant told the Commons: “This is just terribly, terribly complacent.

“It’s 3,218 days since the annexation of Crimea and there are still British companies which seem to be invested in Crimea, let alone British companies that are still invested – including Infosys from what I understand … still operating in Moscow and in Russia with a staffed office.

“He says he’s not going to comment on individual companies. He does it all the time. That’s what sanctions are.”

In a statement issued in response to Mr Ustenko’s comments, BP said: “BP is exiting Russia, we have no intention of ‘returning to business as usual’.

BP is exiting Russia, we have no intention of 'returning to business as usual'

BP statement

“Just three days after Russia’s attack on Ukraine, BP announced that we will exit our shareholding in Rosneft and other businesses in Russia – we said the attack was ‘a fundamental change.’ This is still our position.

“As a result of our decisions we had to take a charge of over $24 billion in our accounts – the largest such financial impact on any company. And we no longer report any equity share of earnings, production or reserves from Rosneft – reducing our reported earnings by c $2 billion a year, oil and gas production by a third, and oil and gas reserves by just over a half.

“Since our decision, BP has not received any dividends from the Rosneft shares. It is our understanding that, under Russian regulations, any payments to a company in an ‘unfriendly state’ such as the UK would go into a highly restricted Russian bank account from which money could not be transferred without Russian government approval.”